Economic development plan putting locals at its core

Our policy is a mix of strategies at community level that will revive the economy

THE STRUCTURE of the City of Johannesburg’s economy, its economic history and the energy of its people lie at the centre of local economic development policy .

One of the foremost theorists of development economics, Michael Sherraden , contends that local economic development should exploit local assets to grow output. His theory finds value in empowering local persons, especially those on the margins of the mainstream .

For more than 130 years, Joburg’s economy has been the location of opportunities. The mining boom provided jobs , its output accounted for a significant share of the national economy, its resources stimulated industry and its people generated an energy shared by the rest of the population.

Over the years, renewal programmes have succeeded one another, but challenges abound. For example the unemployment rate of 33%. Sector analysis shows that crucial industries have shifted operations . In 1996, manufacturing accounted for 20% of the economy but by 2013 had shrunk to 16%. Contractions were recorded in other sectors , including electricity and other household consumables that declined by 1% and 7% respectively. Mining production has also declined. Sectoral decline is the leading variable in high levels of unemployment occurring in an economy that experienced jobless growth. Other implications of sector decline are insufficient research and innovation , human capital stagnation and a dearth of innovation.

The private sector and municipality should work with Wits University and the University of Johannesburg on research and development. Business cycles and competitiveness economics in other markets indicate that these variables tend to form a vicious cycle that leads to the destruction of the local economic asset.

For the Joburg economy, its sectoral economic history should act as a source of renewal for increasing input and promoting employment. The revival of manufacturing is a solution that will promote greater labour absorption for semi-skilled and highly skilled cohorts. The rise in the city financial services sector – from 22% in 1996 to 32% by 2013 – shows that the revival of manufacturing requires appreciation of local people to exploit capabilities and resources, and convert these into competitive products for the global markets.

The new city administration continues to make substantial financial resources available for human capital and enterprise development .

The growing population is a source of economic growth. The population is around 4.94 million residents . Joburg receives about 3 027 migrants a month . This population will come in handy in infrastructure development, manufacturing and agri-processing. Internal population movements have put a lot of pressure on our capacity to provide services. The major needs are housing and settlements requirements, roads, waste management, security and community social services .

Consistent with the ethos of community development, the shared growth brand of Joburg’s programme prioritises investment in local infrastructure. Infrastructure investment span roads, urban housing, township general economic development, community cleaning service, schools and safety. Our administration has planned for the provision of these in a way that will provide multiplier effects .

The spirit of our procurement policy encourages winning bidders to provide internship and apprentice opportunities to students and graduates . Infrastructure development offers unparalleled opportunity to launch public works programmes. However, this should not be an opportunity to promote job casualisation and temporary solutions. Rather, employment opportunities should be used for business creation by communities as they collaborate to create enduring co-operatives .

This approach takes cognisance of the capabilities and entrepreneurial energy of its people. Joburg is at work in the informal economy. A walk in the street reveals entrepreneurs providing assorted services . These activities act as an inalienable source of income and employment . Our approach should include formalising them, providing an ideal environment for local-asset business growth, and protecting our entrepreneurs from street pimps and sharks. Practical steps include providing the necessary support for registering such businesses , assisting proprietors to meet regulatory requirements and providing trading structures, public toilets and adequate security.

Our development policy is a confluence of strategies at community level that will revive the economy and propel it to lofty economic heights. It’s a celebration of local people, their economic activities, skills and capabilities that will rewrite the economic fortunes of the city.